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article imageMoscovici says working to avoid sanctions on Italy

By AFP     Dec 18, 2018 in World

European Economic Affairs Commissioner Pierre Moscovici said Tuesday he was working to avoid Italy being sanctioned over its 2019 budget, reiterating that Rome and Paris were not being held to two different standards.

"I am currently working so that Italy is not sanctioned. I am hopeful," Moscovici said on French radio station RTL.

"We are working hard with a constructive dialogue so Italy can carry out the policy it wants... but that it does so in respecting the rules" on EU public finances, he added.

The European Commission in October rejected the budget submitted for approval by the Italian coalition government of the far-right League and the anti-establishment Five Star Movement.

The budget would see Italy's deficit spending rise but remain below the EU-mandated limit of 3.0 percent of GDP.

EU officials have said it does not sufficiently tackle Italy's huge debt pile, which stands at 130 percent of GDP.

But since French President Emmanuel Macron's concessions last week to the "yellow vest" protests that will see the France's budget blow past the 3.0-percent deficit limit, Italian officials have complained publicly they are being held to a higher standard.

"We are working constructively because, in effect, not only don't I like different standards, I don't like injustice," Moscovici said, dismissing suggestions that France was receiving favourable treatment when its 2019 public sector deficit is forecast to come in at 3.2 percent compared to the 2.04 percent for Italy.

Last week Moscovici insisted that Italy needed to make an additional effort to pare back its 2019 budget.

At the same time, Moscovici, a former French finance minister, explained that a "limited, temporary and exceptional" breach of the 3.0-percent deficit limit was "conceivable", in reference to the situation in France.

France's deficit finally made it under the EU's deficit cap in 2017, after years of being above the limit.

Macron's government has announced some 10 billion euros ($11.4 billion) in concessions that aim to boost the purchasing power of those worst off. The "yellow vest" movement began as a protest against fuel tax increases.

One of the reasons Italy's budget includes increased spending is to finance a basic income for the unemployed and those living on low wages.

Deputy Prime Minister Matteo Salvini said Monday that Italy has found four billion euros worth of savings to stop the European Union from opening disciplinary procedures, including possible fines, over its 2019 budget.

If an agreement is not reached, Italy could find itself the target of an EU excessive deficit procedure, which could ultimately lead to fines of up to 0.2 percent of the nation's GDP.

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